Technology trends, insights and news

July 20, 2005

Missing: All That Post-Grokster Legislation

Okay. We admit it. We were wrong. We thought that there would be a veritable rush on Congress the minute the Grokster decision was handed down to codify around the margins of ruling. We thought that Congress would feel it necessary to get laws on the books pronto to codify how content owners get paid in a free-wheeling P2P world, how those elusive, but well known "bad-actors" get punished and how innovation and technology can continue to flourish within any sort of newly created statutory structure.

We also thought that the RIAA and MPAA would pull an Induce Act and be the first to write a draft that would be so extreme that any compromise would be decidedly tilted in the favor of the entertainment industry.

Yet, the congressional silence has been deafening since last month's ruling.

And this is just fine with the entertainment industry as revealed in a Congressional Internet Caucus roundtable held yesterday in DC and covered by CNET and InternetNews....

The CNET piece notes:

Justice Stephen Breyer in his concurring opinion on the MGM v. Grokster
case noted that "the legislative option remains available." But so far,
members of Congress have applauded the court's unanimous opinion and indicated they plan to leave rule-making to the lower courts for now.

And that's the way it should be, said Don Verrilli, who argued the high court case on behalf of the entertainment industry.

"This is not the time for intervention by Congress," Verrilli said,
because the Supreme Court set a "common sense standard" that gives the
lower courts sufficient fodder to tackle illicit behavior. "I think
(the) court has done a good job in striking the balance with the
standard of inducement that it has set forth here."

Somewhat ironically, it's the EFF that is now pushing for legislation. CNET's Ann Broache paraphrases their suggested approaches as conveyed by the attorney Fred van Lohmann:

First, Congress should implement a "collective licensing" system for
peer-to-peer file sharing, wherein users would pay a "reasonable fee,"
which would in turn be passed on to the copyright holders. Second,
lawmakers should scrap the idea of statutory damages--that is, money
awarded to copyright owners because of provisions in the law--but leave
open the option of awarding actual damages and injunctions through the
court action.

InternetNews also quotes Lohmann giving the bottom line on why Hollywood and the tech world need to come together to reach a compromise outside of the lower court process:

"Congress needs to clear the way for collective licensing of P2P file sharing, allowing P2P users to pay a reasonable fee to 'get legit,'" von Lohmann said. "Today, one in five American Internet users are downloading from P2P networks, despite more than 12,000 lawsuits filed by the entertainment industry. More lawsuits will not resolve the P2P dilemma."

Von Lohmann seems to want Congress to legislate a new "bright line"
that would clearly establish clear protection for inventors and
innovators. An admirable goal, but considering how godawful most of the
IP-related legislation emerging from Congress has been in the past 10
years I'd class this as a foolish wish.
Congress doesn't seem inclined to act in any case, which means we're
likely going to have to go back to a series of lower-court cases and
appeals to try and establish what Grokster's "intention" standard
means. Even if we got a bright line, that doesn't mean it would
necessarily be a better or more sensible situation

What's a little surprising to us is that EFF has so aggressively moved from representing the Groksters and StreamCasts of the world to speaking in the name of the Apples and the Microsofts. It's perhaps a wise political move by EFF, but why are they filling the industry void on post decision comment?

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